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Dana Gardner: Hello,
and welcome to the next edition of the BriefingsDirect
Voice of the Customer podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and
moderator for this ongoing discussion on digital transformation
success stories.
 |
| Gardner |
Our next use of sustainable resources
improvement interview examines how more companies are plunging into the circular economy
to make the most of their existing IT and business assets. We’ll now hear how
more enterprises are optimizing their IT kit and finding innovative means to
reduce waste -- as well as reduce energy consumption and therefore their carbon
footprint.
Stay with us now as we learn
how a circular economy mindset both improves sustainability as a benefit to
individual companies as well as the overall environment. Here to help us explore
the latest approaches to sustainable IT is William
McDonough, Chief Executive of McDonough
Innovation and Founder of William
McDonough and Partners. Welcome to the show, William.
William McDonough: Thank
you, very much.
Gardner: We
are also here with Gabrielle
Ginér, Head of Environmental Sustainability for BT Group, based in London. Welcome, Gabrielle.
Gabrielle Ginér: Hi,
there.
Gardner: William, what are the top trends driving the need for reducing waste, redundancy, and inefficiency in the IT department and data center?
McDonough: Materials
and energy are both fundamental, and I think people who work in IT systems that
are often optimized have difficulty with the concept of waste. What this is
about is eliminating
the entire concept of waste. So, one thing’s waste is another thing’s food --
and so when we don’t waste time, we have food for thought.
 |
| McDonough |
A lot of people realize that
it's great to do the right thing, and that would be to not destroy the planet
in the process of what you do every day. But it's also great to do it the right
way. When we see the idea of redesigning things to be safe and healthy, and
then we find ways to circulate them ad infinitum, we are designing for next use
-- instead of end of life. So it's an exciting thing.
Gardner: If my
example as an individual is any indication, I have this closet full of stuff that’s
been building up for probably 15 years. I have phones and PCs and cables and
modems in there that are outdated but that I just haven’t gotten around to
dealing with. If that’s the indication on an individual home level, I can hardly
imagine the scale of this at the enterprise and business level globally. How
big is it?
Devices designed for reuse
McDonough: It’s as
big as you think it is, everywhere. What we are looking at is design is the
first signal of human intention. If we design these things to be disassembled and
reusable, we therefore design for next use. That’s the fundamental shift, that
we are now designing differently. We don’t say we design for one-time use: Take,
make, waste. We instead design it for what's next.
And it's really important,
especially in IT, because these things, in a certain way, they are ephemeral.
We call them durables, but they are actually only meant to last a certain
amount of time before we move onto the next big thing.
If we design your phone in the
last 25 years, the odds of you using the same phone for 25 years are pretty
low. The notion that we can design these things to become useful again quickly
is really part of the new system. We now see the recycling of phone boards that
actually go all the way back to base materials in very cost-effective ways. You
can mine gold at $210 a ton out there, or you can mine phone boards at about
$27,000 a ton. So that’s pretty exciting.
Gardner: There
are clearly economic rationales for doing the right thing. Gabrielle, tell us
why this is important to BT as a telecommunications leader.
Ginér: We have
seen change in how we deal with and talk to consumers about this. We actually
encourage them now to return their phones. We are paying for them. Customers can
just walk into a store and get money back. That’s a really powerful incentive
for people to return their phones.
Gardner: This
concept of design for reuse and recovery is part of the cradle-to-cradle design
concept that you have helped establish, William. Tell us why your book, Cradle
to Cradle, leads to the idea of a circular economy?
Reuse renews the planet
McDonough: When
we first posited Cradle to Cradle, we said you can look at the Earth and
realize there are two fundamental systems at play. One is the biological system
of which we are a part, the natural systems. And in those systems waste equals food.
It wants to be safe and healthy, including the things you wear, the water, the
food, all those things, those are biological nutrients.
Then we have technology. Once
we started banging on rocks and making metals and plastics and things like
that, that’s really technical nutrition. It’s another metabolism. So we don't
want to get the two confused.
When we talk about lifecycle,
we like to refer it to living things have a lifecycle. But your telephone is
not a living thing -- and we talk about it having a lifecycle, and then an end of
life. Well, wait a minute, it's not alive. It talks to you, but it's not alive.
So really it's a product or service.
In Cradle to Cradle
we say there are things that our biology needs to be safe, healthy, and to go
back to the soil safely. And then there is technology. Technology needs to come
back into technology and to be used over and over again. It's for our use.
And so, this brings up the
concept we introduced, which is product-as-a-service. What you actually want
from the phone is not 4,600 different kinds of chemicals. You want a telephone
you can talk into for a certain period of time. And it's a service you want,
really. And we see this being products-as-services, and that becomes the circular
economy.
Once you see that, you design
it for that use. Instead of saying, “Design for end-of-life. I am going to
throw it in a landfill,” or something, you say, “I design it for next use. That
means it’s designed for disassembly. We know we are going to use it again. It becomes
part of a circular economy, which will grow the economy because we are doing it
again and again.
Gardner: This
approach seems to be win-win-win. There are lots of incentives, lots of
rationales for not only doing well, but for doing good as
companies. For example, Hewlett Packard
Enterprise (HPE) recently announced a
big initiative about this.
Another part of this in the IT
field that people don't appreciate is the amount of energy that goes into
massive data centers. The hyperscale cloud companies are investing billions of
dollars each a year in these new data centers. It financially behooves them to consume
less energy, but the amount of energy that data centers need is growing at a
fantastic rate, and it’s therefore a larger percentage of the overall carbon
footprint.
William, do carbon and energy also
need to be considered in this whole circular economy equation?
Intelligent energy management
McDonough: Clearly
with the issues concerning climate and energy management, yes. If our energy is
coming from fossil fuels, we have fugitive carbon in the atmosphere. That's
something that's now toxic. We know that. A toxin is material in the wrong
place, wrong dose, wrong duration, so this has to be dealt with.
Some major IT companies are
leading in this, including Apple, Google, Facebook,
and BT. This is quite phenomenal, really.
They are reducing their energy consumption by being efficient. They are also adding
renewables to their mix, to the point that they are going to be a major part of
the power use -- but it's renewably sourced and carbon-free. That’s really
interesting.
Gardner:
Gabrielle, how is BT looking at the carbon and energy equation and helping to
be more sustainable, not only in its own operations, but across your supply
chain, all the companies that you work with as partners and vendors?
Ginér: Back
to William's point, two things stand out. One, we are focused on being more
energy efficient. Even though we are seeing data traffic grow by around 40
percent per year, we now have nine consecutive years of reducing energy
consumption in our networks.
 |
| Ginér |
To the second point around renewable
energy, we have an ambition to be using 100 percent renewable electricity by
2020. Last year we were at 81 percent, and I am pleased to say that we did a
couple of new deals recently, and we are now up at 96 percent. So, we are
getting there in terms of the renewables.
What's been remarkable is how
we have seen companies come together in coalitions that have really driven the demand
and supply of renewable energy, which has been absolutely fantastic.
As for how we work with
our suppliers like HPE, for example, as a customer we have a really
important role to play in sending demand signals to our suppliers of what we
are looking for. And obviously we are looking for our suppliers to be more
sustainable. The initiatives that HPE announced recently in Madrid are
absolutely fantastic and are what we are looking for.
Gardner: It’s
great to hear about companies like BT that are taking a bellwether approach to this
leadership position. HPE
is being aggressive in terms of how it encourages companies to recycle and
use more data center kit that’s been reconditioned so that you get more and
more life out of the same resources.
But if you are not aggressive,
if you are not on the leadership trajectory in terms of sustainability, what’s the
likely outcome in a few years?
Smart, sustainable IT
McDonough: This
is a key question. When a supplier company like HPE says, “We are going to care
about this,” what I like about that is it’s a signal that they are providing services.
A lot of the companies -- when they are trying to survive in business or trying
to move through different agendas to manage modern commerce -- they may not
have time to figure out how to get renewably powered.
But the ones that do know how
to manage those things, it becomes just part of a service. That’s a
really elegant thing. So, if a company like HPE says, “Okay, how many problems
of yours can we solve? Oh, we will solve that one for you, too. Here, you do what
you do, we will all do what we do -- and we will all do this together.” So, I
think the notion that it becomes part of the service is a very elegant thing.
As we see AI coming in, we have to remember there is this thing called human intelligence that goes with it, and there is natural intelligence that goes with being in the world.
Gardner: A lot
of companies have sustainability organizations, like BT. But how closely are
they aligned with the IT organization? Do IT organizations need to create their
own sustainability leaders? How should companies drive a more of the point of
the arrow in IT department direction?
McDonough: IT is
really critical now because it’s at the core of operations. It touches all the
information that’s moving through the system. That's the place where we can
inform the activities and our intentions. But the point today is that humans,
as we see artificial
intelligence (AI) coming in, we have to remember there is this thing called
human intelligence that goes with it, and there is a natural intelligence
that goes with being in the world.
We should begin with our values
of what is the right thing to do. We talked about what's right and wrong, or
what’s good and bad. Aristotle
talked about what is less and more; truth in number. So, when we combine these
two, you really have to begin with your values first. Do the right thing, and
then go to the value, and do it all the right way.
And that means, let’s not get
confused. Because if you are being less bad and you think it's good, you have
to stop and think because you are being bad by definition, just less so. So, we
get confused.
Gardner:
Gabrielle, some thoughts about why sustainability is an important driver for BT
in general, and maybe some insights into how the IT function in particular can
benefit?
Ginér: I
don't think we need a separate sustainability function for IT. It comes back to
what William mentioned about values. For BT, sustainability is part of the company’s ethos.
We want to see that throughout our organization. I sit in a central team, but we
work closely with IT. It’s part of sharing a common vision and a common goal.
Positive actions, profitable results
Gardner: For
those organizations planning on a hybrid IT future, where they are making
decisions about how much public cloud, private cloud, and traditional IT -- perhaps
they should be factoring more about sustainability in terms of a lifecycle of
products and the all-important carbon and energy equation.
How do we put numbers on this
in ways that IT people can then justify on that all-important total cost of ownership
and return on investment types of factoring across hybrid IT choices?
McDonough: Since
the only constant in modern business life is high-speed change, you have to
have change built into your day-to-day operations. And so, what is the change? The
change will have an impact. The question is will it have a positive impact or a
negative impact? If we look at the business, we want a positive impact
economically; for the environment, we would like to have a positive impact
there, too.
Since the only constant in modern business life is high-speed change ... for the environment we would like to have a positive impact there, too.
The executives see this and
realize it’s about revenue generation actually. And so, we can balance our CAPEX
and our OPEX and we can do optimization across it. That means a lot of
equipment that’s sitting out there that might be suboptimal is still
serviceable. It's a valuable asset. Let it run but be ready to refurbish it
when the time comes. In the meantime, you are going to shift to the faster,
better systems that are optimized across the entire platform. Because then you
start saving energy, you start saving money, and that’s all there is to it.
Gardner: It
seems like we are at the right time in the economy, and in the evolution of IT,
for the economics to be working in favor of sustainability initiatives. It’s no
coincidence that we are seeing at HPE that
they are talking more about the economics of IT as well as sustainability
issues. They are very closely linked.
Do you have studies at BT that
help you make the economic case for sustainability, and not just that it's the good
or proper thing to do?
Ginér: Oh yes,
most definitely. Just last year through our Energy Efficiency Program, we saved
29 million pounds, and since we began looking at this in 2009-2010, we have saved
more than 250 million pounds. So, there is definitely an economic case for
being energy efficient.
Gardner: I’m
afraid we’ll have to leave it there. We have been exploring how more companies
are plunging into the circular economy to make the most of their existing IT
and business assets. And we have learned how a circular economy mindset both
improves sustainability as well as enhances the ability of companies to adapt
to change and put in more of a hybrid IT-factored economic benefit.
McDonough: Thank
you.
Gardner: We
have also been joined by Gabrielle Ginér, Head of Environmental Sustainability
for BT Group, based in London. Thank you, Gabrielle.
Ginér: Thank
you, very much.
Gardner: And a big thank you to our audience for joining this BriefingsDirect Voice of the Customer digital transformation success story. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-sponsored interviews.
Thanks again for listening.
Please pass this on to your IT community, and do come back next time.
Listen to the podcast. Find it on iTunes.
Download
the transcript. Sponsor: Hewlett
Packard Enterprise.
Transcript
of a discussion on how
more companies are seeking sustainable resources improvement by adopting circular
economy principles to make the most of their existing IT and business assets. Copyright
Interarbor Solutions, LLC, 2005-2019. All rights reserved.
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